Electrolux aims at implementing strict norms and efficient processes to ensure that all operations create long-term value for shareholders and other stakeholders. This involves the maintenance of an efficient organizational structure, systems for internal control and risk management and transparent internal and external reporting.

Founded in Sweden in 1919 by entrepreneur Axel Wenner-Gren, Electrolux has shaped living for the better for 100 years by reinventing what great taste, care and wellbeing experiences mean for our consumers. This is our story.

Electrolux Q2 2018 Interim report: On track despite headwinds

Net sales amounted to SEK 31,354m (30,948). Sales growth was 0.7% with organic sales growth across most business areas.

Operating income amounted to SEK 827m (1,919), corresponding to a margin of 2.6% (6.2).

Operating income include costs of SEK 818m, whereof SEK 564m relates to an investigation by the French Competition Authority and SEK 254m to an unfavourable court ruling in France, both impacting Major Appliances EMEA. Excluding these non-recurring items, operating income amounted to SEK 1,645m, corresponding to a margin of 5.2% (6.2).

Income for the period decreased to SEK 517m (1,291), and earnings per share was SEK 1.80 (4.49).

President and CEO Jonas Samuelson’s comment

We continue to execute on our profitable growth strategy in a challeng­ing cost environment. Sales growth amounted to 0.7%, mainly driven by higher prices and improved mix in our core appliances. Despite significantly higher raw material costs and currency headwinds, we delivered earnings in the second quarter in line with our overall expecta­tion. Underlying operating income was SEK 1,645m, corresponding to a margin of 5.2%. It is encouraging to see that our focus on innovative products delivering great consumer experiences result in market share gains in our core branded product categories across the Group. We intensified our cost actions in the quarter and reprioritized some activities to mitigate the increased currency headwind.

EMEA’s strong performance continues, thanks to innovative products resulting in market share gains. Earnings for our operation in Asia/Pacific remained solid. Professional Products had a strong quarter with an oper­ating margin of over 14% and a sales growth of close to 7%. The business area has great momentum across all segments. Home Care & SDA is in a product transition phase and is investing for important launches within the growing cordless vacuum cleaner segment.

Our operation in North America was impacted by significantly lower air care volumes, which, in combination with sharply increasing input costs, explain the drop in operating income compared to last year’s strong second quarter. The important steps we have taken in strengthening our core appliances under the Frigidaire brand are continuing to result in market share gains. The Latin American business area had a challenging quarter, including handling the nation-wide truck driver strike in Brazil. However, I am very pleased with the teams’ focus on implementing price increases and cost measures to mitigate the negative impact from accelerating raw material costs and currency.

In addition to the price increases already implemented, we have announced further price increases in key markets, primarily in North America and Latin America. In combination with cost reductions we are determined to mitigate the increasing headwinds from raw mate­rial costs and currency. We now estimate the negative year-over-year impact from raw materials to be approximately SEK 1.8 bn in 2018 and we plan for cost inflation following the recently announced trade actions under Section 301 in the U.S..

Current industry trends indicate a slightly softer market demand outlook for North America, Latin America and Australia, to a large extent driven by higher market prices caused by higher input costs.

We continue to take important steps in strengthening our product portfolio. I am excited about the important product launches we have in our pipeline for the second half of this year and continuing into 2019. This together with our ongoing reengineering programs in North America, Latin America and EMEA are important elements to achieve profitable growth.

Our focus on creating best-in-class consumer experiences, raising prices in key markets and cost management will allow us to mitigate the headwinds we are facing. Looking ahead, I am confident that we are well positioned to execute on our profitable growth strategy.

Telephone conference 09.00 CET

A telephone conference is held at 09.00 CET today, July 18. The conference will be chaired by Jonas Samuelson, President and CEO of Electrolux. Mr. Samuelson will be accompanied by
Anna Ohlsson-Leijon, CFO.

For further information, please contact:

This is information that AB Electrolux is obliged to make public pursuant to the EU Market Abuse Regulation and the Securities Markets Act. The information was submitted for publication, through the agency of the contact person set out above, at 0800 CET on July 18, 2018.

Read more

Share this page

Subscribe via e-mail

Electrolux is a leading global appliance company that has shaped living for the better for more than 100 years. We reinvent taste, care and wellbeing experiences for millions of people, always striving to be at the forefront of sustainability in society through our solutions and operations. Under our brands, including Electrolux, AEG and Frigidaire, we sell approximately 60 million household products in approximately 120 markets every year.

This website uses cookies. By continuing to browse this website without changing your web-browser cookie settings, you are agreeing to our use of cookies. Find out more by reading our cookie guideline.